While Netflix was previously poised to acquire Warner Bros. Discovery as part of a deal valued at $82.7 billion, the company has since pulled back in light of a new deal offered by Paramount Skydance. In an interview with Bloomberg, Netflix CEO Ted Sarandos was asked about why the company didn’t pursue the acquisition further, to which he responded by saying that “We didn’t need it.” He also referred to the offer made by Paramount Skydance as “unusual, irrational, whatever words you want to use in that.”
“It’ll be fascinating to see the next steps. I have been on the record a lot in the last two weeks talking about what I think the future looks like,” he continued. “I’m confident in our future that we’re not impacted by all that. In fact, maybe it’s to our advantage. But I hope I’m wrong for the sake of the industry.”
Warner Bros. Discovery presented “an incredibly unique opportunity” for Netflix, according to Sarandos. “We definitely wanted this asset. We didn’t need it.” As for the future, the company doesn’t seem to have any other acquisitions planned. Rather, the $2.8 billion it got from Paramount Skydance as part of the breakup fee will be reinvested in Netflix. “We are builders, not buyers,” he said. “All that is still true.”
Sarandos’ statement echoes the one he made alongside co-CEO Greg Peters when Netflix announced that it was pulling out of the bidding war for Warner Bros. Discovery. In a statement, they described the company as a “nice to have” if the price were right, and not a “must have at any price.”
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
As for Paramount Skydance, its deal to acquire Warner Bros. Discovery is valued at around $111 billion, with WBD shares valued at around $31 each in cash. As part of this deal, Paramount will own the entirety of Warner Bros. Discovery, including its film properties and studios, its linear cable networks, and even studios under the Warner Bros. Games umbrella.
Back when Netflix was still part of the deal, the company had not mentioned Warner Bros. Games in its announcements. Peters had noted that, while he was impressed with the games released by the division, it was “relatively minor” in the grand scheme of things. Despite this, however, he had noted excitement at getting to work with some of the properties built by WB Games, citing Hogwarts Legacy as “a great example”. He went on to note that, “They’ve got great studios and great folks working there. So we believe that there’s definitely an opportunity there. But just to be clear, we haven’t built that into our deal model.”
In the meantime, Paramount Skydance hasn’t yet made any statements about its plans with Warner Bros. Games. However, considering the amount of debt taken on by the company for this acquisition (around $78 billion), layoffs across Warner Bros. Discovery may occur over time.
